BUSINESS

Auxiliary pensions unlikely to hit 100 euros 12 years from now

ROULA SALOUROU

TAGS: Finance

Auxiliary pensions have been in steady decline for some time now and are likely to shrink even further, to less than 100 euros a month, according to a scientific study seen by Kathimerini.

The study, which was supervised by Panteion University Professor Savvas Robolis, contains some startling data regarding the future of auxiliary pensions. The most most shocking finding, however, is a scenario which sees the average monthly auxiliary pension dropping to below 100 euros gross – from the current average of around 170 euros per month after constant cuts – due to a projected spike in baby boomer retirements in the 2023-29 period and an aging population, combined with the new system auxiliary social security introduced last year.

According to the study, auxiliary pensions were paid out to 1.65 million recipients last month, with annual spending reaching 2.7 billion euros. If the 120,000 outstanding allowances – amounting to 250 million euros – are included, then annual expenditure reaches 2.95 billion. Using that second set of figures, the average monthly amount of 170 euros is 20 percent below the 210 euros/month paid out in 2015.

In the coming years, annual contributions are estimated at 2.35 billion euros (from 2.25 million salaried workers and 90,000 self-employed) and the average amount for auxiliary pensions will reach 130 euros, as analysts foresee an annual deficit of 600 million euros.

The study’s writers tell Kathimerini that the single auxiliary social security fund (ETEAEP) now operates on a system that is not funded by the state, with automatic stabilizing factors activated each time a deficit emerges. Therefore, unless there is a drastic change in the system or the number of workers in the economy, by the year 2029 the average auxiliary pension is unlikely to reach even 100 euros gross.

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